Chapter 2
A Free Market Philosopher
Adam Smith
Rent, Wages, Interest, and Profit are also called
Factor Payments
How are most public goods paid for in the U.S.
Taxes
Physical objects such as baseballs are called
Goods
Most desirable alternative not taken when making a choice
Opportunity Cost
Individuals get paid this for their Entrepreneurship
Profit
Government Hands off is called
laissez faire
Two advantages of a market economy are
More Freedom and efficiency
The study how people choose from scarce resources
Economics
The resource used when making a choice
trade-off
The purchase of goods and services takes place in what market
The Product Market
Economic system that relies on habit, custom, or rituals
Traditional
What system will entrepreneurs achieve the most
Market Economy
Physical Capital and Land are
Factors of Production
Who owns the resources in a market economy
Individuals/Households
What kind of system does the Government make all the decisions
Command/Centrally Planned
A system requiring strict obedience to a government or a dictator
Authoritarian
An economic system based on Gender Roles
Traditional
Workers education, training, and skills are
Human Capital
Economic term that means fairness
Equity
What is the motivating force behind the free market
Self Interest
Kind of economy most nations in the world have today?
Mixed
All natural resources refers to
Land
A temporary lack of Goods
Shortage
3 basic Econ questions
What to produce, how to produce, and for whom to produce